Power Purchase Agreements (PPAs) are essential contracts in the energy sector, enabling businesses and utilities to purchase electricity directly from renewable energy producers.
By locking in long-term rates, PPAs provide financial stability for energy projects while allowing buyers to secure a steady supply of green energy. These agreements not only help mitigate market fluctuations and reduce energy costs but also support corporate sustainability goals and the transition to a cleaner energy future. Whether you’re a company aiming to reduce your carbon footprint or a developer seeking reliable revenue streams, PPAs offer a mutually advantageous solution for all stakeholders.
Our team of specialised consultants assists you in navigating your organisations PPA strategy, the complex financial reporting landscape and the intricate tax implications. Our comprehensive suite of services is tailored to support all stakeholders involved in PPAs, from energy producers to corporate buyers. We provide strategic, regulatory, and financial guidance to enhance the success of your PPA initiatives.
Our services
We can bring in the required specialist knowledge and skill based on your individual requirements.
- Detailed analysis of historic, current, and predicted energy consumption to determine energy requirements.
- Analysis and valuation of potential energy generation assets for PPAs and how they align with energy consumption.
- Optimising PPA portfolio structure based on your strategic requirements for green energy.
- Provide market soundings to inform procurement pathways.
- Provide support and prepare materials for a PPA procurement process, buy-side or sell-side.
- Financial analysis of offers and lead discussions with counterparties.
- Advise and support on technical reporting requirements, such as RE100.
- Advise on Guarantees of Origin (GoOs).
- Assessment of PPA options with regards to renewable energy standards.
- Develop fair valuation methodology and model: establish a fair valuation approach, creating a model for financial instruments and calibrating it for unobservable inputs.
- Ongoing support for PPA fair valuation: continuously assist with the fair valuation of Power Purchase Agreements, adapting techniques as needed.
- Determine fair value hierarchy: classify instruments within the hierarchy based on the relevance of observable and unobservable inputs, as per IFRS 13.
- Assist with IFRS 13 disclosure requirements: guide disclosure practices to ensure compliance and consistency with IFRS 13 standards.
- Determine the appropriate accounting treatment considering various accounting requirements such as lease accounting, derivative accounting, 'own use' exemption, accounting for Renewable Energy Credits (RECs) and addressing disclosure requirements.
- Assistance with designing a hedge accounting strategy and approach in line with the various hedge accounting requirements
- Implementing hedge accounting including formal hedge documentation, hedge effectiveness testing, accounting treatment under hedge accounting and disclosure requirements.
- Strategic analysis to optimise tax benefits associated with PPAs.
- Ensuring adherence to tax regulations related to renewable energy projects and PPAs.
- Advising on regulatory changes and updates impacting the tax treatment of renewable energy investments and PPAs.
- Providing training and workshops to enhance client understanding of tax implications and opportunities associated with PPAs and renewable energy projects.
Get in touch
From the initial origination to final reporting, through the intricate tax considerations, our team provides comprehensive support at every step of the Power Purchase Agreement (PPA) journey.
Whether you are in the early stages of structuring and negotiating your PPA, navigating the complexities of valuation and accounting, or ensuring compliance with reporting requirements, we are here to guide you. Our integrated approach ensures that all aspects of your PPA—financial, regulatory, and sustainability—are well managed, enabling you to achieve your goals with confidence and clarity.
We put value at the heart of everything we do. We understand the needs of our clients and endeavour to help them respond to the evolving market environment and business needs. Our team of experienced subject matter experts are focused on delivering quality outcomes for our clients. Our access to KPMG’s global network of treasury professionals ensure that we can draw on their experience to have the right support, advice and services you need.
To find out more about how KPMG can help you focus on what’s next for your treasury, please get in touch with our team below. We’d be delighted to hear from you.
Carmel Logan
Partner
KPMG in Ireland
Ciara Wrafter
Partner
KPMG in Ireland
Francisco Jimenez
Principal, KPMG Financial Instruments Lead
KPMG in Ireland
Terence McGovern
Director
KPMG in Ireland
